Plan Your Exit Carefully
Selling your business should be a careful and organized effort. In managing this process, we at VR aim to maximize your sale proceeds as well as the prospects for the business’ success under new ownership. Your assistance is essential to this process. Please be ready to share clear and accurate financial statements, tax returns, leases, and other materials necessary for your business’ valuation and sale. This process takes time on your part, and may require some time away from your day-to-day management of the business.
All businesses will eventually either change hands or close
Reasons for selling a business vary with each business owner. Reasons can be as simple as a need for change such as retirement, or as complex as a health challenge or a divorce. Preparing an exit strategy is a necessary step to being ready to sell your business when the time is right for you. John Hornblower, Managing Broker at VR Aspen, can help you prepare for this day.
Key elements of an effective exit strategy
- SET A TIMELINE. Establish a timeline so that you can prepare in advance of the marketing and sale of the business. Bear in mind that selling a business can require more than a year’s effort. Be ready to maximize the performance of the business during this time.
- KNOW THE BASICS OF BUSINESS VALUATION. Business owners often think their business is worth more than a qualified buyer would be willing to pay for it. It is important to establish realistic expectations before beginning the process of selling your business.
- FOCUS ON THE FUNDAMENTALS. Develop a strong team in management, sales and operations. Invest in up-to-date technology and equipment. Maintain an attractive appearance of your business. All these factors add value.
- LET THE NUMBERS TELL YOUR STORY. Make sure that the previous two or three years of financial Statements accurately reflect the performance of your business. Clean financial statements that dovetail with tax returns are critical to the sales process. Any differences between financial statements used by management and tax returns will need to be explained effectively. Your accountant may need to prepare book-to-tax reconciliations for this purpose.
- DO SOME TAX PLANNING. Visit with your tax professional to understand how the income from the sale of your business will be taxed. There may be ways to minimize and defer these taxes. Let your tax professional offer you guidance.
Once you have decided to consider selling your business, contact John Hornblower, Managing Broker of VR Business Brokers in Aspen, CO. John will help you manage the entire process, confidentially and professionally. John can be reached at 970 429-8220 and at [email protected].
It is our job to orchestrate this process and help you achieve your goal.
When the time is right for you to start, we’ll be there to help. Please contact us with any questions and or need of assistance.